by John McCulloch…..

PSA Peugeot Citroën is back!  The opening sentence from an article in Le Monde, the newspaper of record in France says it all.
“After a loss in 2014 of 555 million euros, the company under Carlos Tavares made a profit of 1.5 billion euros.”   How did he do it?   Essentially he reduced the cost of production of each vehicle on average by 1,000 euros.   He also closed the huge production facility in Aulnay-sous-bois (on the outskirts of Paris) laying off some 8,000 workers.  He also moved employees into companies that produced parts for PSA.

Carlos Tavares, incoming Chief Executive Officer of French carmaker PSA Peugeot Citroen, attends a panel with journalists in Paris, March 3, 2014. Tavares, a former head of operations at Peugeot's rival Renault, was speaking to a press panel organised by French trade publication 7pm Auto in collaboration with Reuters, his first full interview since taking operational charge at Peugeot last month. REUTERS/Christian Hartmann (FRANCE - Tags: BUSINESS TRANSPORT) Carlos Tavares

Tavares was also keen to reduce the cost of salaried workers.  In 2013, that cost was 14% of the business.  In 2015 it represented 11.7 % of the business.

It is not clear yet what Tavares’ cost cutting measures will have on Citroën’s effort to preserve its marque at Le Conservatoire which is also located at Aulnay-sous-bois.

citroen-conservatoire-dyane

It is presumed that some cars from Le Conservatoire will end up in The Musée de l’Aventure Peugeot (Museum of the Peugeot Adventure, a historical museum devoted to the Peugeot automobile business at Peugeot’s huge industrial site at Sochaux), but the vast bulk will remain at the Aulnay site.

Musee_Peugeot_Sochaux